Global Economics

Bharti Plunges on Regulator's Ruling

December 14, 2007

On news of a ruling in favor of new players, shares of India's leading mobile operator fell more than 6%. Its 53 million subscribers are at stake

Shares in India's leading mobile operator, Bharti Airtel Ltd, fell more than 6%, a day after a tribunal ruled in favor of new players for spectrum that would increase competition, a Reuters report said.

The Reuters report said India's wireless market is the world's fastest growing that has been signing up about 8 million subscribers a month, but the expansion has caused a shortage of spectrum or airwaves needed to connect mobile calls.

Earlier, India's telecoms tribunal asked the government to issue spectrum to new players "right away," and to defer the allotment of additional spectrum to existing players until a government committee recommends fresh rules, the Reuters report said.

Bharti, with nearly 53 million mobile subscribers at end-November and a more than 23% share of the market, will be the biggest loser, analysts said.

The tribunal's ruling will clear the way for No. 2 player Reliance Communications, which mainly operates on the CDMA platform but is expanding to the popular GSM services, the report said.

India had issued separate licences and spectrum for CDMA and GSM services, but decided in October to allow Reliance to use the same license for offering GSM in new telecom circles or zones, the report further said.